Posted tagged ‘Karma’

Turkey lira crashes to new lows as market alarm grows

August 10, 2018


© AFP | The lira’s drastic fall has European banks worried

10 August 2018 – 13H20 France 24

Source Link: Turkey lira crashes to new lows as market alarm grows

{Trump drops another economic bomb. – LS}

ISTANBUL (AFP) –

Turkey’s embattled lira on Friday hit new record lows against the US dollar and euro, losing over six percent in value as strains with the United States showed no sign of abating and fears grew over the exposure of European banks.

The lira was trading at 5.90 to the dollar, a loss on the day of 6.5 percent. Earlier, it had crashed some 12 percent through the 6.00 level for the first time in history, trading at one point at more than 6.20 lira per dollar.

The lira has now lost over a third of its value against both the dollar and the euro this year, with the currency battered by both concerns over domestic economic policy and the political situation.

Versus the euro on Friday the lira lost 7.0 percent to trade at 6.8.

Turkey remains at loggerheads with the United States in one of the worst spats between the two NATO allies in years over the detention for the last two years of American pastor Andrew Brunson and a host of other issues.

Talks this week in Washington failed to resolve the impasse which has led both sides to slap sanctions on senior officials amid fears of graver measures to come.

– Doubts over central bank –

Meanwhile, markets are deeply concerned over the direction of economic policy under President Recep Tayyip Erdogan with inflation nearly 16 percent but the central bank reluctant to raise rates in response.

UBS chief economist for EMEA emerging markets Gyorgy Kovacs said a giant rate hike of 350-400 basis points would be “consistent with real rate levels that in the past helped to stabilise the currency.”

He warned a “rate hike alone might not stem the worries about the US and Turkey tensions and a potential further escalation.”

And it remains unclear if the bank would be willing to sharply lift rates with analysts saying the nominally independent institution is under the influence of Erdogan, who wants low rates to keep growth humming.

Erdogan after winning June 24 elections with revamped powers tightened his control over the central bank and appointed his son-in-law Berat Albayrak to head a newly-empowered finance ministry.

“President Erdogan’s strengthened powers under the new presidential system have made it increasingly uncertain whether policymakers will be able to act to stabilise the economy,” said William Jackson, chief emerging markets economist at Capital Economics in London.

He said the lira’s fall was being exacerbated by fears the central bank “isn’t being permitted to raise interest rates”.

– ‘Accelerating speed’ –

Concerns were intensified Friday by a report in the Financial Times that the supervisory wing of the European Central Bank (ECB) had over the last weeks began to look more closely at euro zone lenders’ exposure to Turkey.

The report said that the situation is not yet seen as “critical” but Spain’s BBVA, Italy’s UniCredit and France’s BNP Paribas are regarded as particularly exposed.

“Investors have been looking at the unfolding currency crisis in Turkey as a local difficulty, however the accelerating speed of the declines appears to be raising concerns about European banks exposure to the Turkish banking system,” said Michael Hewson, chief market analyst at CMC Markets UK.

Albayrak, who formerly served as energy minister, is on Friday expected to announce what he has described as a “new economic model” for Turkey but markets remain sceptical.

The president did nothing to reassure markets with comments overnight that the pressure on the lira was due to what he described as a “variety of campaigns” and appearing to play down the magnitude of the crisis.

“If they have dollars, we have our people, we have our right and we have Allah!” he said.

The plunge in the lira has featured remarkably little on Turkish television channels and newspapers — most of which after recent ownership changes are loyal to the government — with most media focusing instead on recent flooding by the Black Sea.

© 2018 AFP

Armed Men Raid Iranian Embassy in London

March 9, 2018

Fars News Agency Fri Mar 09, 2018 10:17

Source Link: Armed Men Raid Iranian Embassy in London

{The plot thickens. – LS}

TEHRAN (FNA)- Several Britain-based Shiite extremists affiliated to Sadeq Shirazi sect attacked the Iranian embassy premises in London minutes ago, while menacing the staffers with cold weapons.

Early reports said the raiders are four men who have opened their way into the embassy premises, while threatening people on the scene with machetes and baseball bats. The London Police have reportedly deployed around the embassy but took no action in the first couple of hours after the attack.

The slogans chanted by the raiders indicate that they are members of Sadeq Shirazi Shiite extremist sect, supported by London.

Iran’s Ambassador to Britain Hamid Baeedinejad confirmed the reports on the embassy attack minutes ago.

“A few followers of Shirazi have attacked the Islamic Republic of Iran’s Embassy in London and broke the flag mast,” the ambassador tweeted minutes ago, and added that the raiders are “chanting slogans against Iranian officials”.

He further confirmed that the raiders were carrying “sticks and machetes”, and said Police are deployed on the scene.

The Shirazi sect that has been labeled as “British Shiism” by the Iranian Supreme Leader operates mainly from London. The sect also runs a satellite network called ‘Fadak’ from London and promotes Shiite extremism against Sunni Islam. The sect is also known to be the religious opposition of the Islamic Republic.

Meantime, Iranian Foreign Ministry Spokesman Bahram Qassemi told FNA that “we are investigating into the case and will keep in contact with the Iranian embassy in London and the British embassy in Tehran”.

“The British government is duty-bound to seriously and decisively fulfill its responsibility to protect the Islamic Republic of Iran’s diplomats and diplomatic centers and immediately arrest and prosecute those who have trespassed the diplomatic sanctuary,” the spokesman reiterated.